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Quarterly CPI report (July 16, 11:45 pm GMT)

Consumer prices rose by 1.1% from a year earlier in Q1 2018, which is not only slower than the 1.6% uptick in Q4 2017 but also marks the slowest growth rate since Q3 2016.

The Kiwi popped up for a bit after the report was released but was soon dragged lower by currencies that had bullish momentum at the time.

This week analysts are expecting to see the annualized consumer price gains return to its 1.6% growth rate while the quarterly increase remains at 0.5%.

The Reserve Bank of New Zealand (RBNZ) recently shared its neutral bias even as it recognized that a below-target inflation is “necessitating continued supportive monetary policy for some time to come.” Will a higher reading convince the central bank to lean towards a more hawkish bias?

Dollar’s intraweek trends

As we can see below, the Kiwi’s price action took a lot of cues from the Greenback’s performance.

Uncle Sam is scheduled to print tons of top-tier reports including a speech from Fed head honcho Powell himself, so y’all should keep your eyes glued to the tube in case one or more of them catalysts move the dollar enough to influence the Kiwi’s price action!

Last Week’s Price Review

The Kiwi is currently the third worst-performing currency of the week (as of 7:00 am GMT), which is a rather disappointing performance since the Kiwi was last week’s champ.

Overlay of NZD Pairs: 1-Hour Forex Chart
Overlay of NZD Pairs: 1-Hour Forex Chart

Like the Aussie, trade-related news/rumors and risk sentiment also had an impact on the Kiwi’s price action. In the Kiwi’s case, however, the Greenback’s strength apparently had more weight, which is why the Kiwi is on the losing side this week.

The Kiwi had a somewhat promising start, thanks to the risk-friendly vibes on Monday and the Greenback’s early wobble.

Unfortunately for the Kiwi, the Greenback began to climb broadly higher when Monday’s U.S. session rolled around, which is likely why the Kiwi only barely eked out a win on Monday.

The Kiwi’s resilience against the Greenback eventually began to falter when Tuesday’s Asian session rolled around, becoming a broad-based retreat during Tuesday’s London session, even though risk-taking persisted.

The Greenback’s rally lost steam during the U.S. session, though, so the Kiwi finally got some respite and was able to make its way back up on most pairs.

However, misfortune struck when rumors began to spread that the U.S. will escalate the trade war with China by publishing a list of $200 billion worth of Chinese goods that will be subjected to additional tariffs.

Those rumors were later verified since the U.S. officially announced the rumored list, which caused risk aversion to return in force, crushing demand for the higher-yielding Kiwi.

And to make matters worse for the Kiwi, the Greenback surged higher after Chicago Fed President Evans shifted to a more hawkish stance.

The Kiwi finally found buyers on most pairs again after a Bloomberg report cited “a person familiar with the [Trump] administration’s thinking” as saying that the White House is ready to restart talks with China. And it very likely helped that risk sentiment got revived on Thursday.

Even so, the damage was already done since the Kiwi’s recovery is just not enough to erase the losses it suffered during Wednesday’s slide.

Also, the Kiwi looks ready to resume its slide since the Greenback appears to have regained its footing on Friday after stumbling for a bit on Thursday.